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Are You Saving Enough to Retire On Time?

Are You Saving Enough to Retire On Time?

By Kyle Mostransky, LUTCF®, CLTC
Posted on March 27, 2017

Have you thought about when you want to retire? When you are 62? 65? 70? Do you know how much money you will need to retire when you want to? According to the Employee Benefit Research Institute’s (EBRI) 2016 retirement confidence survey, 77% of workers polled said they expect to retire at a later age than they previously planned, and all of their reasons had to do with uncertainty regarding finances. If you don’t have a strategy in place, there’s a good chance you may not retire on time.

Knowledge is Power

According to the same EBRI study, 48% of workers have never calculated how much they will need to maintain their lifestyles when they retire. If you don’t know how much you need, how will you know how much to save? Unfortunately, determining your savings goals isn’t as easy as plugging data into an online calculator. There are a variety of unique factors involved that will affect the outcome, such as years from retirement, current savings, the economic environment, and retirement lifestyle expectations.

The advice from financial professionals across the board is to save 10% to 20% of income towards retirement, but even that is a vague generalization. If you start saving in your 20s, 10% might do you well due to compound interest, but if you are getting a later start, you will need to save at a higher rate. What steps can you take to ensure that you will be able to retire on your own terms?

Understand Your Savings Benchmarks

While charts and calculators won’t speak to your personal situation, they can give you a big picture of what your savings should look like if you want to meet your goals. Take a glance at the chart below. Instead of showing you what you should save each month from here on out until retirement, it lets you know if you are on track by looking at what you currently have saved. From there, you can evaluate what you need to do if you are behind.

Using a benchmark like this one personalizes your progress by reflecting how much you will need in retirement based on your actual circumstances. Many people rely on Social Security or pensions to provide the bulk of their retirement income, but the more you earn, the less Social Security you will receive, so what you need to save to retire on time will change based on your pre-retirement income.

Max Out Your Savings

There are many uncertain factors when it comes to your retirement financials, but one thing you can control is how much you save. Social Security may change, inflation will increase living expenses, medical costs are unpredictable, and what the economy will do is anyone’s guess. But if you consistently save as much as you can, you are setting yourself up for success. If you already feel maxed out in your budget, make it a habit to save any extra money that comes your way, whether it’s a bonus from your employer, a pay raise, or a tax refund.

When determining what you need to retire, plan on a minimum of $15 to $20 of savings per dollar of the shortage between your Social Security and/or pensions and your retirement living expenses. For example, if your calculations show that your retirement expenses will be $25,000 a year more than is coming in from outside sources, you will need at least $375,000 to $500,000 in savings to ensure you can afford your current lifestyle. The more you save, the more control you have over your financial future.

Reassess Regularly

Life moves quickly and brings many changes as time goes on. Once you’ve set your goals and calculated how much you need to save, make it a habit to reevaluate once a year to make sure you are still on track to meet your benchmarks. It’s also a good idea to reassess your progress if you go through any life transitions such as a job change, marriage, divorce, or having a child.

Take the First Step

One in four people has no idea how much they should be saving for retirement. If this is you, the first step is to consult with a financial professional. If you do know what you are aiming for and how to get there, we can help you stay on track and find ways to boost your savings. No matter how old you are or how little you have saved, it’s never too late as long as you get started today. Get in touch by calling 631-425-9383 or emailing kyle@mostranskyfinancial.com.

About Kyle

Kyle Mostransky is the founder of Mostransky & Associates with more than a decade of experience providing retirement planning and insurance services. He specializes in helping successful business owners, families, and individuals grow, protect, and distribute their financial resources in a manner that’s in alignment with their objectives and values. Passionate about education and understanding the life insurance industry, he is a Life Underwriter Training Council Fellow (LUTCF®) and holds the Certified Long-Term Care designation (CLTC®). Based in Huntington, New York, Kyle serves clients throughout the greater New York City metropolitan area and across the country. To learn more, connect with Kyle on LinkedIn or visit www.mostranskyfinancial.com.

Kyle Mostransky, CLTC, LUTCF®, California Insurance License #0H17709, is a Registered Representative offering securities through NYLIFE Securities LLC, Member FINRA/SIPC, A Licensed Insurance Agency, 15 Green Street, Huntington, NY 11743, (646) 227-8384. Member Agent, The Nautilus Group®, a service of New York Life Insurance Company. New York Life, its agents or employees may not give legal, tax or accounting advice; everyone should seek and rely upon the counsel of his or her own professional advisors. Mostransky & Associates LLC is not owned or operated by New York Life or its affiliates. SMRU 1729070 Exp. 3.24.2019

Kyle Mostransky is an agent licensed to sell insurance through New York Life and may be licensed with various other independent unaffiliated insurance companies in the states of New York, New Jersey, Connecticut, California (CA Lic. 0H17709), South Carolina, Pennsylvania, Texas, and District of Columbia. No insurance business may be conducted outside these states referenced.

Kyle Mostransky is a Member Agent of The Nautilus Group®, a service of New York Life Insurance Company.

Mostransky Financial & Insurance Solutions DBA is not owned or operated by New York Life or its affiliates

Video Material: This material was produced by the Faulkner Media Group, LLC (FMG) which is not affiliated with New York Life Insurance Company or its affiliates. The material has been developed from sources believed to be accurate. The views of FMG may not necessarily represent the views or opinions of New York Life Insurance Company or its affiliates. This information is not intended as tax, legal or accounting advice. For such advice regarding your specific planning situation, you should consult appropriate professional counsel. Opinions expressed or information provided in this material are provided are for general informational purposes only and should not be considered a solicitation for the purchase or sale of any financial product or service.